Retirement; allow certain members of PERS to purchase creditable service for service with non-PERS employers.
The bill will primarily affect members who have worked for non-participating employers, enabling them to bolster their retirement benefits by recognizing additional years of service. In essence, this change opens avenues for those who previously may have completed significant service time in various capacities outside the system, allowing for a more comprehensive approach to calculating retirement benefits. This amendment could potentially lead to increased retirement incomes and incentivize longer career spans within the Public Employees' Retirement System, as members looks to maximize their benefits through possible service credit purchases.
House Bill 1372 proposes to amend Section 25-11-109 of the Mississippi Code to permit certain members of the Public Employees' Retirement System to purchase up to five years of credible service for employment performed at public or private employers that are not members of the retirement system. Specifically, this bill allows members who meet certain qualifications to retroactively count their service years with non-participating employers towards their retirement calculation if they have not received any retirement benefits for that service from any other plan or employer.
Discussions surrounding HB 1372 could involve concerns about the financial implications for the retirement system. Critics may argue that permitting members to retroactively purchase up to five years of service could undermine the fiscal integrity of the Public Employees' Retirement System. Furthermore, there might be discussions regarding the fairness of allowing such retroactive service enhancements, particularly for those who have solely relied on their tenure within the system without additional external employment. The expectation of actuarial cost payments for such credits ensures that this bill does not impose undue financial strain on the retirement fund, but there remains a concern about long-term sustainability.
Should this bill be enacted, it mandates that members pay the actuarial cost associated with each year of service they wish to purchase, a requirement meant to safeguard the retirement system's solvency. This process delineates a clear responsibility on the part of the employee to fund their potential increased retirement benefit without placing the burden on the retirement system itself. The act is set to take effect on July 1, 2022, making it crucial for members to understand the implications promptly to decide if they wish to utilize this option for enhancing their retirement planning.